If your nonprofit organization relies on free Microsoft 365 licenses, a major change is coming. Beginning July 1, 2025, Microsoft will phase out several grant-based plans. That means your next Microsoft Office 365 renew date could trigger the loss of licenses you depend on today—unless you act now.
The good news? Discounted options are still available, and some plans remain free. But navigating what to keep, upgrade, or drop takes planning. This is your opportunity to audit your licensing, reassess your needs, and avoid unexpected costs or service disruptions when your renewal hits.
What’s Changing for Not-for-profits on July 1, 2025
Microsoft is discontinuing several grant-based Microsoft 365 licenses for not-for-profits. Key changes include:
- Ending Free Licenses:
- Microsoft 365 Business Premium (10-user grant)
- Office 365 E1 (up to 300 users)
- Still Available:
- Microsoft 365 Business Basic (Grant): Web/mobile Office apps, Teams, SharePoint, OneDrive (up to 300 users)
- Discounted Licenses (up to 75% off):
- Microsoft 365 Business Premium
- Office 365 E1, E3, E5
- Microsoft 365 E3, E5
- Timing: Changes will take effect at your next renewal, not automatically on July 1.
Why You Should Review Your Licenses Before Renewal
These changes mean many not-for-profits will lose access to core Microsoft tools unless they transition plans. Letting your license auto-renew could lead to:
- Losing access to vital apps
- Unexpected charges if you roll into paid plans unknowingly
- Gaps in service or security coverage
By planning ahead, you can assess:
- Which licenses you’re actually using
- Whether the free Business Basic plan meets your needs
- If security, compliance, or advanced features warrant a discounted Premium or E3 license
Key Licensing Strategies for Not-for-profits
Take advantage of this transition to optimize your Microsoft 365 environment:
- Review Usage: Some users may only need Business Basic, while others require advanced tools.
- Split Licensing: Consider a mix of free and discounted licenses to meet your needs without overspending.
- Assess Security Requirements: If you rely on tools like Microsoft Purview, Intune, or Defender, Business Basic may not be sufficient.
- Use Monthly Licenses to Test Add-Ons: Temporarily add features like Teams Calling or Copilot to evaluate their value.
License Optimization Best Practices
The following steps help ensure you’re not paying for unused seats or missing out on essential tools:
- Align with Workforce Changes: Adjust license counts based on hiring or attrition.
- Clean Up Your User List: Remove inactive, duplicate, or unassigned licenses.
- Understand Upgrade Timelines: Larger user lists may require more lead time to switch plans.
- Leverage Flexibility: Monthly subscriptions cost more (about 20%) but offer valuable flexibility in uncertain periods.
Next Steps: How to Prepare
Start your review well before your renewal date:
- Audit your current license usage
- Define must-have apps and security features
- Compare available nonprofit plans and pricing
- Consult a licensing expert to avoid missteps
Partner with Experts Before You Renew
Don’t let your free Microsoft 365 licenses expire without a plan.
As a Microsoft partner, Anders helps not-for-profits:
- Evaluate which licenses they truly need
- Understand the impact of Microsoft’s 2025 changes
- Maximize value from every dollar spent on technology
Let’s connect before your renewal date to ensure your Microsoft 365 setup is optimized for your mission—and your budget. Contact us to speak with a technology advisor and ensure your Microsoft 365 setup is working for you—not the other way around.
